Liber8 your Business

 

Introduction

‘The price of anything is the amount of life you exchange for it.’ Henry David Thoreau.

Welcome to the world of the rich and free. If you are working hard in your business every day to make money and find yourself wondering where it’s all heading, you’ve come to the right place. By reading this book you are opening a door to a new way of looking at your business. A business can be a ticket to financial freedom and the life of your dreams. If you own your own business, you already have the ticket. This book shows you which train to catch to reach the true destination ... a life of total fulfilment.

This book will challenge your assumptions about your role in your business and will ask you to view yourself in a different light. It will show you how to re-engineer your business in a way that takes the emphasis off of your time and onto your planning ability. It will teach you how to see the future of your business and how to plan for that future. It will also give you practical business development strategies and tactics you can implement now.

First, I need to ask you:

Why did you go into business for yourself?

According to a Dun & Bradstreet* study, ‘businesses with fewer than 20 employees have only a 37% chance of surviving four years (of business) and only a 9% chance of surviving 10 years.’ Restaurants have only a 20% chance of surviving two years. Of these failed businesses, 90% closed because the business was not successful, did not provide the level of income desired, or were too much work for their efforts. The failure rate for new businesses was 70% to 80% in the first year and only about half who survived the first year would remain in business the next five years.

I spend much of my life working with and listening to small business owners, and I am now certain the true reason so many businesses fail (cease to exist) before year four is because people go into business for the wrong reason.

When I make presentations to business groups and ask why they chose to start a business, the answers are always the same. I wonder if you identify with one or some of these reasons people give:

• I thought I could run a business better than my boss.

• I was tired of working for someone else.

• I wanted to be in control of my destiny, choose my own hours, and go on holiday whenever I felt like it.

• I am good at something or trained in a particular field and have built my business around my skill set.

• I had a good idea and believed I could make a business out of it.

• I don’t know; it just sort of happened.

• I want to help people, I’m not in it for the money (this response is particularly true of health practitioners).

Do any of these answers resonate with you? Have you really given much thought to why you are in business or what you really want out of it? Or have you stumbled into business as a reaction to your own personal circumstances without a true sense of purpose driving you?

It’s important to ask yourself; because your reasons for being in business will determine the way you approach it, which, in turn, will influence the ultimate success you have. For me, there are only two reasons why you would choose to start your own business: to make money and to make a difference.

Making Money

‘Being good in business is the most fascinating kind of art. Making money is art and working is art and good business is the best art.’

• Andy Warhol.

Business is a financial game. People who are good at business understand that business is all about delivering returns to the shareholders. Why do you think the CEOs of large corporate earn multi-million dollar salaries? It’s because they know their job is to build a business with positive returns each year. They know how to drive a business machine to generate profit. They are hired as CEO’s for this ability. When I work with business owners, I encourage them to see their business through the eyes of a large corporate CEO. I get them to take their job as CEO and director seriously. The role of a CEO is to ensure that the business is planned and managed in a way that ensures it is consistently generating healthy returns to its shareholders.

A company director is legally obligated to act in the best interests of the Company. Owning the business doesn’t lessen that responsibility.

Making a difference

‘If every business could make an effort to be a force for good then a lot of the problems in the world could be solved.’

• Richard Branson.

A business that cares only about money is a business without a soul. Your business is also there to fulfil a purpose, to add value and make a difference in the lives it touches, whether those people are customers, employees or beneficiaries of the higher purpose your business serves. There is a movement afoot, led to a degree by the champion of business idealism in action, Sir Richard Branson. In his book, Screw Business As Usual, Sir Richard encourages business owners to become a force for good. It is no longer okay to just be great at making money. You have to make a difference, too. And there’s a fun irony to this concept if you can really grasp it. If your business is truly focused on making a real difference to as many people as possible, you will attract more people to you. The more people you attract, the more successful you become and the more people you make a difference to. It’s a wonderful win/win concept and something I ask you to think about as you work through the ideas and exercises in this book.

Liber8 Your Business shows how to combine the concepts of making money and making a difference, so you build a business to not only make you rich but make you feel like a million dollars too!

Read on, the ride is only just beginning.

What is this book about?

Liber8 Your Business is a revolutionary way of planning and building your business to give yourself the absolute best shot at success. My definition of success is that your business has so much value that a buyer will want to pay a significant amount of money for it. Whether you choose to sell your business or not is a different matter. The key point is that if it is so valuable that someone else wants it, then it is successful.

Liber8 Your Business consists of eight stages to financial freedom through business:

 

1. Develop a Freedom Mindset.

2. Become a visionary.

3. Choose your exit strategy.

4. Set your end goal.

5. Plan backwards, using key milestones.

6. Reach your first milestone with an annual business plan.

7. Make it happen, from macro to micro.

8. Learn The Freedom Disciplines.

Liber8 Your Business is founded on the following basic beliefs:

The purpose of a business is to set the owner free.

“What’s money? A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do”

• Bob Dylan

Most of us crave freedom. Most want choice. Ultimately, I believe freedom is the core ingredient of happiness. Being free is to decide what you do each day without having to work to generate money. To be financially free, you have to generate wealth and a flow of passive income that increases to meet future needs and costs. For most, our business is our primary wealth creation tool. The real reason a business is better than a job is you are creating an asset. With a traditional job, you are helping create someone else’s asset. My definition of an asset is something that feeds you wealth.

There are only two ways to create wealth and freedom from your business. One is to create enough value someone will buy it. The other is to build an income stream that lets you spend minimal hours working in the business. I call this approach a leveraged business. This book shows how to steer your business to either or both these models.

Your business is a separate entity.

A business is a legal entity in its own right. Please hear me when I say a business is not you. I will say it again to be sure ... your business is not YOU. This can be a difficult concept for some business owners to take on board, especially if your business is primarily dependent on your clients buying your talent. Health practitioners, consultants, and freelancers, in particular, struggle with this concept. I have been debating with my osteopath for years about his business. He believes he can’t build a business that is not dependent on him. He says he has a special way of doing things that makes him unique from other osteopaths. His clients come to him for his methodology. This can’t be duplicated. Or so he keeps telling me. I don’t believe him, of course. I don’t believe any owner-operator who tells me their business is entirely dependent on them. It’s only true if you believe it to be true. The minute you challenge your own paradigm, you will be able to see that every business - and I mean EVERY business, including yours - can be leveraged. This book shows how.

If your business relies on you to generate business, it is not a business, it’s a job.

If you have created a business that relies on your presence to generate income and you don’t have a plan to change that situation, you haven’t created a business, you’ve created a job. In my view, it is a job if the business is not separate from you. And, if you’re like many other small business owner-operators in the early stage of their business, it’s probably a job that pays less than you should be paid, makes you work longer hours, gives you more stress, and doesn’t let you take enough holidays. Frankly, if you were an employee working for someone else you’d probably file a lawsuit for the way this business treats you. This book shows how to plan for a business in the true sense ... one that does not rely on you.

You will never get rich exchanging time for money

In the Author’s Note, I told you I resigned from an advertising agency and started freelancing. It didn’t take me long to realise I was never going to get rich exchanging time for money. There were simply not enough hours in the day, days in the week, or months in the year. Even if I worked every hour in the year I would still not be wealthy and would probably harm myself trying. I found a better way, a path to financial freedom. This book shows you how to do the same.

Your business is like a shed

If I asked you to build a shed, what would you do? You would do what you do with any project, right? You’d get a picture of how the shed is supposed to look. You’d look at the plans and follow the instructions. You’d get the right tools ready and you might even find someone to help build it, someone with more expertise in this type of construction.

The distinction here is when you’re building a shed you know what it looks like; it’s a project. And a business is a project too. It’s not something that’s forever. It’s going to have an end. Just like any project, if you know what the end looks like, you can devise the plan to get there. It’s a simple concept, but many people don’t start a business that way. Most start a business with no idea where it’s going. As a result, valuable time is lost following strategies and tactics that don’t lead to the ultimate goal ... to build a business that works without you.

If you don’t know where you are going, how will you know when you get there?

You must have an exit strategy

One day you will no longer want to work in your business. It could happen suddenly, or it could happen after a long time of living and breathing your business. Even if you can’t see a day when you ever want to leave your business, the reality is that if you build a valuable business someone will want to pay a lot of money for it. And you will have choice. Choose to sell or choose to keep your profitable, well-managed business. What a wonderful decision to have to make!

The cleanest exit by far is a future sale, where you walk away with a tidy sum to invest and live happily ever after. The ‘leveraged’ business, where you remain the owner and receive income through share dividends or directors fees, is the alternative. There are business models that lend themselves to this and we’ll explore some later. However, this approach comes with warnings based on a number of disasters I’ve seen and heard about.

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When a good exit plan goes wrong ...

Here’s a quick story about two men who started their businesses at the same time. One was my father; the other was his best friend, Ray. Both got into the photocopier industry in the 1970s (you’ll hear more stories about my father and his business throughout this book). Both were successful and within 10 years had built thriving profitable businesses. My father decided to sell his company and walked away with a tidy sum. Ray decided to appoint a managing director to run his business for him so he could enjoy the profits from a distance and with minimal involvement. Fast forward five years. My father had invested his money wisely and was enjoying a life of passive income. He did need to spend time on his investment portfolio, but this was minimal and he was mostly enjoying his retirement. Ray discovered his managing director had been embezzling the company, leaving it insolvent. He not only lost the business but had to repay a mountain of debt. He had nothing to show for his 10 years of business success, and retirement was suddenly out of reach.

It takes time to create a quality business that has value. You don’t want to be in a position where you need to sell your business without having planned for it.

Having a planned exit is a critical component of this book. Liber8 Your Business will show you how and provide the steps to get you there as soon as possible.

View your business as a product

 

A successful angel investor friend explained to me the concept of exit strategy like this: To achieve a successful exit, it helps to view your business as a product. A good business person empathises with their customer and understands their reasons for buying your product. You know what need your product fulfils in the market and who will want to buy it. You use your expertise and experience to create the best possible product to meet this need. You build a relationship with potential customers with a view to making sales.

 

Now, step back and look at your business as a product. Why would someone want to buy your business in the future? Which companies could take your business and create more value with it? What needs do they have that your business could fulfil? How could you build your business to make it easy for them to acquire and integrate it with theirs? This is your market and selling proposition. And just as it takes time to build a customer base for your product, it takes time to build a relationship with your potential buyer. So start now.

 

Subscribe to the concept of leverage

At the end of each year you should be working less in your business than you were at the end of the year before. This objective is something that’s missing in typical business plans and yet your goal towards freedom should always focus on leverage, leverage, leverage.

Here’s a definition of ‘leverage’ I found online at businessdictionary.com:

‘Leverage is the ability to influence a system, or an environment, in a way that multiplies the outcome of one's efforts without a corresponding increase in the consumption of resources. In other words, leverage is the advantageous condition of having a relatively small amount of cost yield a relatively high level of returns.’

If you add the words ‘or time’ after the words ‘small amount of cost’ in the above definition then I think we can really start to appreciate what leverage means in a business sense. It’s about you achieving more by doing less – multiplying the outcome of your efforts and decreasing the time you spend to get this outcome. A typical owner-operator business, such as a plumber or an interior designer, spends all of their time IN the business doing the work to make the money. This is the opposite of leverage. This is using all your resources to achieve the same return, day in and day out. As I said, you are never going to get rich exchanging time for money.

How do you stop the business being dependent on you? If your own skills and talents form the basis of the income for your business, please start to think how you can change this.

How to get the most of this book

In this book I’m taking you on a journey. We’ll start by looking at your mindset to make sure you are ready to be wealthy and free. You will learn how to be a visionary and I will help you choose which exit strategy could be right for your business. You’ll learn the art of planning backwards with milestones all the way from your vision to your business today. You will conduct an audit on your business and clarify the areas you need to work on today to move towards your long-term vision. You will learn the magic of leverage and how to apply it to your business. And you will learn the key disciplines you need to ensure you build your business to its maximum.

Liber8ing Exercises

I’ve included exercises with each chapter so that you can build your vision, your plan, and your action steps as you go. Every time you see this infinity symbol, there is an exercise for you to do. If you complete the exercises, by the end of the book you will have written your exit strategy, your long term vision and plan, and have your action steps confirmed for the next 12 months.

My suggestion would be to read the book through first, to understand the concepts and get a sense of the overall journey you are about to go on. Then go back and do each of the exercises in turn. Make sure you have a pad of large size plain paper, some Post-its, a calculator and any existing business planning work on hand.

Useful tools

Throughout the book I’ll refer to useful tools to help you with various exercises. These can be downloaded for free from the Liber8 Your Business website at www.liber8yourbusiness.com.

More resources

The Liber8 Your Business Online programme contains further resources, including templates, video seminars, and video interviews with successful entrepreneurs. Instructions on joining the programme can be found at the back of the book.

You will get out what you put in

Allow yourself between two to four hours to work on the main exercises. Make a commitment to yourself to work ON your business, book a couple of regular time slots in each week. Try to complete all exercises within a four-week period. Your financial freedom is the prize here, committing quality time to it now will significantly increase your chances of making it happen. I am asking you to do some work here and I make no apologies for this. Success rarely comes without effort.

‘You’ve got to say, I think that if I keep working at this and want it badly enough I can have it. It’s called perseverance.’ – Lee Iacocca

Or as I saw on a billboard recently, ‘I’m not saying it’s going to be easy. I am saying it will be worth it.’ Here’s what an early reader of Liber8 Your Business had to say about the book and the process:

‘This book is absolutely essential reading for any person serious about creating a successful business. Liber8 Your Business confronts you, challenges you and forces you to ask the necessary questions required to create the mindset and structure for a well leveraged business. I believe every business owner needs to go through this process and then build on what they have already created, or change tack completely. My journey is in the early stages, but I feel this book has helped me immensely already. Thank you.’

The choice is always yours. Make a decision to be financially free and let this book help you get there. Let’s get going …

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LAURA HUMPHREYS is a successful businesswoman, mentor and inspirational speaker. Her book Liber8 your Business comes directly from her own business journey. Laura went from a job as a secretary in a London advertising agency to owning her own agency and selling it to the multi-national, Ogilvy Group, just nine years later. She started this business with nothing – no clients, no staff, just a windowless office with no natural light and no running water. When she sold it, it was billing in excess of $15 million and had been named Agency of the Year. The selling of her first business brought Laura financial independence, which meant she was in a position where she could choose how she spent her time.

Laura then co-founded Pet Angels, a highly systemised award winning pet care business, with a fully automated online search and booking facility that minimised admin requirements to the point where the owners only had to work 10 hours a week. This business sold to a competitor after just six years.

Laura has become passionate about the concept of ‘leverage’ in business – doing more with less to the point where businesses do not rely on their owner in order to generate income. She gives regular talks to business groups and mentors business owners about creating freedom from business. Liber8 your Business is Laura’s entrepreneurial response to the need for a practical guide to planning and building a business that will set you financially free.

Learn more at www.liber8yourbusiness.com

 

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Tag der Veröffentlichung: 21.02.2014

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